What is needed to create an economic environment in the “Safe Zone”
Enab Baladi – Diana Rahima
The Turkish government pledges that the establishment of a safe or buffer zone in northern Syria, where about a million refugees will return, is approaching, which raises assumptions about the possibility of creating an economic environment in that area that would allow the returning Syrians to find new ways of living.
On 3 May, Turkish President Recep Tayyip Erdogan revealed the Turkish government’s efforts to prepare a project to ensure the “voluntary return” of one million Syrian refugees to their country, according to what was reported by the Turkish A Haber channel, in statements he reiterated with a group of Turkish officials.
He said that the Turkish government, in cooperation with Turkish and international civil society organizations, is seeking to establish a full-fledged housing and service project.
Turkey has influence in the regions of northwestern Syria, in the northern and eastern countryside of Aleppo, and the Idlib region, as well as the regions of Ras al-Ain and Tel Abyad, in northeastern Syria.
A plan that is beyond the capacity of the region
The economic environment in northern Syria, whether in the western or eastern regions or even in the areas under the control of the Syrian regime, does not in any way allow the absorption of large numbers, according to what economic researcher Khaled Turkawi told Enab Baladi.
A group of people may be able to secure their needs, but when we talk about communities of large numbers, the conditions are not suitable, according to Turkawi.
As for food, a large number of displaced persons and locals cannot secure their needs from it, while a large number of residents in camps and tents are threatened by weather factors. These tents are not more than a temporary place of residence for several days, not for years.
There is also a large number of unemployed men and women, and returning a large number of young men will either make them unemployed or involved in military affairs with moderate or even extremist groups, according to the researcher.
The number of internally displaced persons in northwestern Syria is about 2.8 million, of whom 1.7 million live in camps.
Over 75 percent of the population suffers from food insecurity in northwestern Syria (3.1 million out of 4.4 million people), and an additional 1 million people are at risk of food insecurity, according to a 2022 UN report.
The region’s economic challenges
On the extent of the region’s financial ability to withstand more arrivals to a specific geographical area, which is already suffering from several factors, the Minister of Economy in the Syrian Interim Government (SIG), Abdul Hakim al-Masri, explained in an interview with Enab Baladi that the arrival of another million Syrians besides the existing population, amounting to approximately 25 percent of the current population, will certainly increase the high unemployment and poverty rates and the housing crisis.
According to the Turkish plan, the region will be equipped with economic facilities, after which those who want to return can voluntarily return to it, but according to al-Masri, the only obstacle in the field of development is the presence of many projects with high costs that no one can undertake to improve the region, such as irrigation projects and securing drinking water.
In addition to the difficulty of investments in these areas, the investor is not yet convinced to work in the “liberated” areas, despite the presence of seven industrial zones, some of which began to operate with some factories working in al-Bab and al-Rai areas.
On the other hand, there are important projects that have started to be active in the region, as the minister gave examples of the industrial city in the al-Rai region, reducing cement prices to about 15 US dollars per ton, while a factory for the manufacture of bags for agricultural crops started its activity, at a time when all these products were being imported.
There are Turkish and Syrian investments in the region, and foreign companies can also invest if they find encouraging factors to do so.
However, one of the most important obstacles facing investors is the lack of recognition of the laws and documents of the “liberated areas” institutions, which causes a problem with the certificates of origin as well as the transfer of funds, according to the minister.
The minister revealed the preparation of investment law, along with an economic council for investment.
He also indicated that there is no serious coordination so far between the SIG’s Ministry of Economy and the Turkish government regarding the “Safe Zone” project in terms of its economic details.
The plan is currently limited to the work of Turkish organizations and parties in the construction of concrete houses, which does not reflect real steps for the region yet, the minister concluded.
Economic researcher at the Omran Center for Strategic Studies, Mohammed al-Abdullah, identified to Enab Baladi a set of variables that emerge in the issue of voluntary return and its connection to the economic aspect, as follows:
First: Population density
The population density in the areas included in the return plan, according to what was circulated by the Turkish side, is high, as the number of residents exceeds the barrier of 2.5 million people, a dense proportion in a geographical area that does not exceed 8,500 square kilometers.
Thus, expectations indicate a high level of population density in these areas above the normal level.
This density will impose many living challenges and high rates of unemployment and poverty within these areas, and therefore, the return is supposed to take place in the form of batches to reduce the economic and social burden associated with it.
Second: Housing sector
One of the main challenges that residents of these areas have faced over the previous years is finding housing, and despite the great movement in the housing and construction sector that these areas are witnessing, a large percentage have not been able to secure suitable housing for economic reasons, including the high purchase and rental prices that exceed the capacity of a large proportion of the inhabitants.
Therefore, if the return does not coincide with the Turkish government’s pledge to secure housing for all returnees, the return will represent a new crisis for residents in terms of housing, and consequently, their social stability will be affected.
Third: Economic and financial environment
Since 2016, the region has seen no actual indicators of economic and development growth. Thus, the level of employment generated in various productive sectors is relatively stable. This is mainly due to the low level of private investment in these sectors, owing to security instability and the absence of formal governance to guarantee investors’ rights, as well as the difficulties associated with import and export and related requirements.
Much of the region’s economic movement is concentrated in the sectors of trade and housing that do not generate enough job opportunities to absorb the high unemployment ratios among residents and returnees.
As for the financial sector, it is still not regulated and lacks the necessary banks and financial institutions to keep pace with the expected investment movement, and the matter is still limited to the presence of some branches of the Turkish Postal Corporation (PTT) that provide some financial services.
Accordingly, al-Abdullah believes that the next step will be to provide the opportunity for the entry of Turkish private and governmental banks, and other financial institutions interested in operating within these areas, after the lifting of sanctions (the US Treasury has exempted the regions of northeastern and northwestern Syria from sanctions, with the exception of Afrin and Idlib).
A local investment authority with an executive arm can also be established, in cooperation and coordination with the Turkish side, to determine the appropriate investment map for these areas in terms of sectors and opportunities available to investors. Besides activating chambers of industry and commerce and local councils’ financial offices as government entities in these areas.
Syrian investors residing in Turkey and Turkish industrialists and owners of commercial companies have a hoped role in opening branches for their facilities within these areas after providing specific government credit facilities, concessions, and guarantees to facilitate the movement of imports and export and obtaining the Turkish certificate of origin of manufactured materials within these areas.
Thus, the Turkish government will seek to ensure the success of these investments in their founding phases so that they will be a catalyst for attracting greater investments in the future, as well as eliminating obstacles to local investors for their investments established within these areas, researcher al-Abdullah said.
The steps associated with the investment aspect have clearly been the establishment of the first building blocks of industrial cities in the past two years, which can be seen as a key pillar for the development of these areas if they are given the necessary attention to their success and to secure all their logistical and technical requirements.
Fourth: Labor market
The current labor market is witnessing great competition for job opportunities among residents in these areas. If a million refugees return, competition will increase dramatically and hurtfully, according to researcher Mohammed al-Abdullah.
Consequently, statistics on unemployment and the distribution of workers in different sectors are needed to reach accurate estimates that take into account the preservation of residents’ economic and social stability.
There have recently been demonstrations by some residents rejecting the return plan, reflecting these groups’ sensing of threat to their economic security.
In addition, civil society organizations’ efforts through training and development projects to improve the capabilities of individuals to acquire the skills needed to enter the labor market will be clearly affected in the light of the significant future competition for employment opportunities, as returnees have acquired more work skills in Turkey than those living in northern Syria, according to al-Abdullah.
The infrastructure in these areas was not at an adequate level before 2012, and it has deteriorated significantly in light of the years of conflict due to bombing, vandalism, encroachment on public property, and the over-digging of underground wells. Some areas still suffer from the problems of lack of water, electricity, sanitation, and paved roads.
Researcher al-Abdullah believes that the success of the return project is mainly linked to the extent to which the infrastructure can be rehabilitated to serve approximately four million Syrians as part of a mini-integrated reconstruction process within these areas.
Thus, the future focus will be on infrastructure development through Turkish companies that will be entrusted with this task, which are world-class companies with good capabilities to carry out this task as soon as funding is available.
Many Turkish companies were anticipating the reconstruction process in Syria to be part of it, and this could be a step for them in this regard, especially with the US sanctions exception, which gives them more freedom to move on the financial and investment side.
Sixth: Security environment
Researcher al-Abdullah believes that the return of this human mass within a fragile security environment poses significant challenges to the level of economic and social stability of returnees, local residents, and displaced persons.
The fundamental determinant of the success of this return will be heavily linked to the extent to which the security situation is controlled by creating an atmosphere of reassurance for families, traders, investors, and other groups.
Al-Abdullah believes that this task is not easy given the complexities associated with the security reality in these areas and their neighboring regions.
However, the Turkish government is counting at the same time on winning regional and international consensus to succeed in its endeavors in establishing the safe zone and to enhance its security and social stability to achieve a number of political, security, and economic gains.
The Turkish authorities manage the region’s economy through local councils, which it helped in establishing and financing by providing the region with services, facilitating investment in it, supporting traders and industrialists, injecting its national currency, and providing it with financial institutions.
Enab Baladi prepared an investigation entitled: “Turkey is shaping northern Syria’s economy—but who is benefitting?” which shed light on the Turkish economic contribution to the regions of northern Syria and the economic returns for both sides.
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